CPA Financial Planning

Although Certified Public Accountants (CPAs) are often associated with taxes and tax planning, many CPAs expand their practices to include financial planning and advisory services. CPAs acting as financial planners may offer advice in areas such as estate planning, retirement planning, risk management, and investments. Some CPAs may offer a range of services, while others choose to specialize in a particular area like tax planning.

It is quite natural for CPAs to begin offering financial planning services since they are already familiar with their clients’ financial situations, have established a trusted relationship with their clients, and understand the tax aspects of financial planning.

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The American Institute of Certified Public Accountants (AICPA) suggests that CPAs who make good financial planners have the following qualities:

  • The ability to work with a range of client personalities
  • The ability to communicate complex financial concepts in easy-to-understand language
  • An analytical and detail-oriented mindset
  • A willingness to help others
  • A desire for life-long learning
  • Strong ethical code

CPA Education

*Qualifying for a CPA license requires a bachelor’s degree at minimum and a total of 150 semester hours of college credit to include coursework in accounting, business and ethics. Since bachelor’s programs typically result in just 120 semester hours of credit, the American Institute of CPAs (AICPA) maintains that earning a Master of Science in Accounting is the best way to achieve the full 150 semester hours you will need for your CPA license. The MS in Accounting through Syracuse University provides the credits you need in a flexible online program designed to build upon your undergraduate education while accommodating your schedule.

Earning a CPA License

certified public accountant on the job

Becoming a CPA requires a state-issued license from the Board of Accountancy specific to the state in which the CPA intends to practice. The requirements for becoming licensed differ slightly between states, but for the most part they all conform to the general requirements set forth in the Uniform Accountancy Act (UAA):

  • Bachelor’s degree at minimum
  • 150 semester hours of college courses, which is 30 hours more than the typical four-year bachelor’s degree
  • One year of supervised experience
  • Passing score on the Uniform Certified Public Accountant Exam

One way to meet the 150-hour requirement is to complete a five-year combined bachelor’s and master’s accounting degree program offered by many colleges and universities. However, a graduate degree in another area related to finance is an option, as is taking advantage of the many college-level continuing education classes available to accountants and other financial professionals.

The Bureau of Labor Statistics reports that less than half of candidates who take the CPA exam pass all four parts on the first attempt. The requirement in most states is that candidates pass all parts of the exam within 18 months of passing one component. Testing centers located throughout the United States offer the computerized CPA exam during two months of every calendar quarter.

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Nearly all states require CPAs to complete professional continuing education for license renewal, although the number of hours required varies by state.

Other Licenses and Registrations required

CPAs don’t necessarily need other licenses to offer general financial planning services; however, CPAs who choose to directly buy or sell investment products such as bonds, stocks, mutual funds, or annuities need to have the proper licenses, as do CPAs who provides specific investment advice and who operate with discretionary authority over client accounts:

  • Selling fixed annuities requires a state-issued life insurance/annuity license earned by taking pre-licensing courses and passing a life line of authority state-specific exam.
  • Selling securities requires a General Securities Representative Series 7 license earned by exam through the Financial Industry Regulatory Authority (FINRA).
  • Providing specific recommendations on securities and other investment vehicles and holding discretionary authority over client accounts requires state or federal registration as an Investment Adviser. Registration of this kind requires candidates to pass either the Series 65 Uniform Investment Adviser Law Examination, or the Series 7 in combination with the Series 66 Uniform Combined State Law Examination. A smaller practice managing less than $100 million in client assets would register with the state Division of Securities for each state in which it operates. Investment Advisers that manage client assets in excess of $100 million register at the federal level with the Securities and Exchange Commission (SEC).

Personal Financial Specialist

The American Institute of Public Accountants (AICPA) offers a financial planning credential that is available only to CPAs: Personal Financial Specialist (PFS).

To qualify to take the PFS exam, CPAs must have two years of full-time personal financial planning experience and 80 hours of education related to personal financial planning gained within the last five years. Meeting one of the following requirements would also allow CPAs to be eligible for the PFS designation:

  • Holding the designation of Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC)
  • Having broad knowledge and/or experience in personal financial planning and completing the AICPA PFS Exam Review Course
  • Taking personal financial planning courses offered by the AICPA that cover the financial planning process including planning specific to taxation, estates, retirement, investments, and insurance, and then completing the PFS Exam Review Course

CPAs who hold the PFS designation must recertify every three years. During this three-year period they must be members in good standing with the AICPA, have a valid and unrevoked CPA certificate from a state authority, and complete 60 hours of continuing education related to the personal financial planning Body of Knowledge as outlined by the AICPA.

Certified Financial Planner (CFP)

CPAs can also pursue the Certified Financial Planner designation through the Certified Financial Planner Board of Standards Applicants for the CFP must pass an exam testing their ability to use FINANCIAL-PLANNING,FINANCE concepts in real-life financial planning scenarios. CFP candidates must demonstrate an understanding of almost 100 topics related to financial planning and hold a bachelor’s degree, or its equivalent, earned through an accredited college or university. Licensed CPAs in good standing with their state board automatically meet both of these educational requirements.

Becoming a Certified Financial Planner also requires having at least three years of full-time, relevant personal financial planning experience, in addition to agreeing to adhere to a code of ethics.

Certified Financial Planners must complete 30 hours of continuing education every two years, including two hours of ethics.

Chartered Financial Consultant (ChFC)

Some CPAs opt to pursue the Chartered Financial Consultant (ChFC) designation through The American College. The ChFC certification focuses on the needs of professionals and small business owners in the areas of insurance, income tax, investments, retirement planning, and estate planning. This designation requires completing seven required and two elective courses provided through The American College.

Becoming a ChFC requires three years of full-time business experience within the past five years and an agreement to abide by the established code of ethics. An undergraduate or graduate degree from an accredited institution can take the place of one year of business experience.

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The continuing education requirement is 30 credits every two years.

Specialty Certifications Held By CPA Financial Planners

Specialty certifications are also available to financial planners who specialize in a particular area, such as retirement planning (for example, Certified Retirement Financial Advisor from the Society Of Certified Retirement Financial Advisors) or estate planning (for example, Chartered Trust and Estate Planner from the American Academy of Financial Management).

Salary and Employment

CPAs who work in a financial advisory capacity are found in banks, securities and commodity brokerage firms, investment firms, and wealth management firms. According to the Bureau of Labor Statistics (BLS), about 29 percent of personal financial advisors are self-employed, and about eight percent of all accountants are self-employed as owners and operators of independent practices.

Although the BLS does not publish salary data specific to CPAs, it was reported that the 2019 mean salary for all accountants and auditors was $71,550. It is important to mention that CPAs working as Investment Advisers often collect a percentage of the clients assets they manage, actual earnings are often much higher than the salaries reported by the Bureau of Labor Statistics. The BLS expects the number of jobs available to accountants to increase by 4 percent during the current ten-year period ending 2029.